Rs200b mini-budget to appease IMF on cards

The Government of Pakistan is reportedly considering introducing a mini-budget of around Rs200 billion ($1.2 billion) in an effort to appease the International Monetary Fund (IMF) and secure a new bailout package. The move comes as the country's economy continues to struggle, with high inflation, a widening trade deficit, and a shortage of foreign currency reserves.

The proposed mini-budget, which is expected to be announced in the coming weeks, is aimed at reducing the country's budget deficit and increasing revenue collection. The government is reportedly considering a range of measures to achieve this, including increasing taxes on luxury goods, cutting subsidies, and privatizing state-owned enterprises.

One of the key measures being considered is an increase in the general sales tax (GST) from 17% to 20%. This would raise an additional Rs40 billion in revenue and help to reduce the budget deficit. Additionally, the government is also considering increasing taxes on luxury goods such as cars and mobile phones, as well as cutting subsidies on items such as electricity and gas.

The government is also looking at ways to increase revenue collection by privatizing state-owned enterprises. This could include selling stakes in companies such as Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM), which have long been a drain on the country's finances. The government is also considering the sale of non-performing assets such as real estate and shares in public sector companies.

The proposed mini-budget is also expected to include measures to control inflation, which has been a major concern in recent months. The government is reportedly considering increasing interest rates to curb inflation, as well as taking steps to stabilize the exchange rate of the Pakistani rupee.

The government has been under pressure from the IMF to take steps to reduce the budget deficit, increase revenue collection, and control inflation. The proposed mini-budget is seen as a way to address these concerns and pave the way for a new bailout package.

However, the proposed measures are likely to be met with resistance from some quarters, particularly those who will be affected by the tax increases and subsidy cuts. The government will need to tread carefully in order to avoid a backlash from the public and businesses.

The mini-budget is being seen as a crucial step towards securing a new bailout package from the IMF, which Pakistan has been seeking for several months. The country's economic troubles have been exacerbated by the COVID-19 pandemic, which has hit Pakistan's tourism and textile industries hard.

The government has been under pressure from the IMF to take steps to reduce the budget deficit, increase revenue collection, and control inflation. The proposed mini-budget is seen as a way to address these concerns and pave the way for a new bailout package.

However, the proposed measures are likely to be met with resistance from some quarters, particularly those who will be affected by the tax increases and subsidy cuts. The government will need to tread carefully in order to avoid a backlash from the public and businesses.

In conclusion, the Government of Pakistan is considering a mini-budget of around Rs200 billion as a measure to appease the International Monetary Fund (IMF) and secure a new bailout package. The move comes as the country's economy continues to struggle with high inflation, a widening trade deficit, and a shortage of foreign currency reserves. The government is considering a range of measures to achieve this, including increasing taxes on luxury goods, cutting subsidies, privatizing state-owned enterprises and controlling inflation. It is expected that the proposed measures may face resistance from certain quarters, the government will have to take a well-calculated approach to avoid backlash from public and businesses. The proposed mini-budget is seen as a crucial step towards securing a new bailout package from the IMF, which Pakistan has been seeking for several months.